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Meltem Demirors believes that the current Bitcoin price drop is a correction, and it is weeding out the paper hands.
The downward trend in Bitcoinâs (BTC) price following its April all-time high might be worrying for first-time investors. Still, CoinShares chief strategy officer Meltem Demirors believes that most of the long-time holders are not selling, and this is a correction to weed out panic sellers.Â
Speaking to CNBC, Demirors underscored that Bitcoin is here to stay, and after 200 days of crypto market expansion, itâs normal to have a price drop. âYou canât have a number go up forever,â she added, stating:
âWhat weâre seeing is a correction, a contraction, and a lot of what is getting shaken out is what we call the paper hands, the weak hands.â
âPaper handsâ is a popular market term to describe an investor who canât endure high financial risk and starts selling as soon as the asset price begins to drop. Itâs the opposite of âdiamond hands,â which simply means a pressure-resistant holder.
Reminding that the crypto market, excluding Bitcoin, is up 200% for the year, Demirors said that Bitcoin has always been a volatile asset class. âIâm not going anywhere even if we go to $20,000. Last March, we were at $3,000 for Bitcoin,â she said, adding that âwe have to keep the context in mind.â
She said that many retail investors who didnât do their research are selling, while long-term holders continue to wait. âIf we look at on-chain activity, wallets that have been holding for a long time have actually been using this opportunity to accumulate,â she added.
Glassnode data confirms Demirorsâ point. According to its data, Bitcoin addresses that do not sell the coins they accumulate have increased their holdings since Aprilâs all-time highs.
Related: Bitcoin drops below $30K to 6-month lows: Watch these next price support levels
Demirors said that she expects to see consolidation at the current price level with the uncertainty at the macro scale. âThereâs a lot of uncertainty around policies. Thereâs also a lot of negative headlines,â she reasoned.
Meanwhile, Bitcoin is heading for its worst quarter since the start of the 2018 bear trend, according to crypto data aggregator Skew. Data shows that Bitcoin is down nearly 46% for the quarter, the weakest quarter since Q1 2018.
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The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.